Chandrakant M.Patel, Dist.Anand V. The Income tax Officer,Ward-2, Anand

ITA 542/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5910 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 13-02-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER DATE OF HEARING:14.06.10 DRAFTED ON: 14.06.10 ITA NO.542/AHD/2008 ASSESSMENT YEAR : 2004-2005 SHRI CHANDRAKANTH M. PATEL, PLOT NO.1207, PHASE- IV, OPP.RAILWAY CROSSING, VITTHAL UDHYOGNAGAR, TALUKA & DISTRICT-ANAND. VS. THE INCOME TAX OFFICER, WARD -2, ANAND PAN/GIR NO. : ADRPP6948C (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI MEHUL K. PATEL RESPONDENT BY: SHRI K. MADHUSUDAN SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-IV, BAR ODA, DATED 21.10.2007. 2. THE SOLE GROUND OF THE APPEAL TAKEN BY THE ASSES SEE READS AS UNDER:- 1. THE LD.A.O. HAS WRONGLY CONSIDERED THE AGRICULT URAL INCOME OF RS.5,32,197/- AS INCOME FROM UNDISCLOSED SOURCES U/S.68. THE APPELLANT HAS BEEN HAVING AGRICULTURE INCOME FR OM AGRICULTURE OPERATIONS ON HIS AGRICULTURE LAND. THE LD.CIT(A) HAS WRONGLY UPHELD THE SAID ORDER OF THE A.O. - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME SHOWING INCOME OF RS.29,810/- AND AGRICULTURE INCOM E OF RS.5,32,197/-. THE LEARNED ASSESSING OFFICER OBSERVED THAT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, THE ASSESSEE HAS S OLD TOBACCO AMOUNTING TO RS.5,32,197/-, THE ASSESSEE FILED COPIES OF EXTR ACTS OF 7/12 AND 8A AND ALSO A SALE BILL DATED 28.04.2004 FROM SHRI VIRENDR ABHAI KALIDAS PATEL SHOWING THAT 8571 MUNS OF TOBACCO @ RS621/- PER MON TH HAS BEEN PURCHASED FROM THE ASSESSEE. IT WAS ALSO SUBMITTED THAT RS.1,60,000/- WAS RECEIVED BY THE ASSESSEE IN THE PREVIOUS YEAR RELEV ANT TO ASSESSMENT YEAR 2004-05 AND RS. 3,72,197/- WAS RECEIVED IN THE PREV IOUS YEAR RELEVANT TO ASSESSMENT YEAR 2005-06. THE LEARNED ASSESSING OF FICER ISSUED A COMMISSION TO THE LEARNED ASSESSING OFFICER OF SHRI VIRENDRA K. PATEL REQUESTING HIM TO VERIFY THE GENUINENESS OF THE TRA NSACTION BETWEEN SHRI VIRENDRABHAI PATEL AND SHRI CHANDRAKANT M. PATEL. I N HIS STATEMENT ON OATH, SHRI VIRENDRABHAI PATEL COULD NOT GIVE A CLE AR CUT REPLY REGARDING THE AMOUNT OF TOBACCO AND THE PRICE OF WHICH IT WAS PUR CHASED. HE ALSO COULD NOT GIVE DETAILS REGARDING THE USE OF SO CALLED PUR CHASE OF 8571 MUMS OF TOBACCO. THESE FACTS WERE COMMUNICATED BY THE LEAR NED ASSESSING OFFICER TO THE ASSESSEE AND WAS REQUESTED TO EXPLAI N THE CLAIM OF AGRICULTURE INCOME. THE ASSESSEE FAILED TO REPLY TO THE SHOW CAUSE NOTICE AND THEREFORE, THE LEARNED ASSESSING OFFICER HELD T HAT IN VIEW OF THE FACT THAT THE PURCHASER OF THE SO CALLED AGRICULTURAL PR ODUCE IS ENABLE TO SUBSTANTIATE THE ASSESSEES CLAIM OF SALES, THE GEN UINENESS OF THE SALE MADE WAS DOUBTED AND AS NO EXPLANATION WAS SUBMITTED BY THE ASSESSEE. THE LEARNED ASSESSING OFFICER ADDED RS.5,32,197/- TO TH E INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT UNDER SECTION 6 8 OF THE INCOME TAX ACT, 1961. - 3 - 4. IN APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X(APPEALS) OBSERVED THAT THE ASSESSEE FILED A SALE RECEIPT DAT ED 28.04.2004, WHICH DOES NOT FALL IN THE CURRENT ASSESSMENT YEAR. THE ASSESS EE HAS NOT FILED SINGLE EVIDENCE TO SHOW THAT HE HAS IN FACT GROWN TOBACCO ON HIS LAND. NO DETAILS OF EXPENSES INCURRED OR BILLS RELATING TO EXPENDITU RE ON SEEDS, ELECTRICITY, TRANSPORTATION, LABOUR, ETC. HAS BEEN FILED BY THE ASSESSEE. HIS ENTIRE CLAIM OF AGRICULTURE EXPENSES IS BASED ON TWO SHEETS OF P APER GIVEN TO HIM BY SHRI VIRENDRA K. PATEL WHO THE ASSESSEE HIMSELF ADM ITS CANNOT BE RELIED UPON. IN THE ASSESSMENT YEAR 2003-04, THE ASSESSEE HAS CLAIMED AGRICULTURE INCOME APPROXIMATELY RS.89,000/-. IN A SSESSMENT YEAR 2005- 06 HE HAS CLAIMED AGRICULTURAL INCOME APPROXIMATELY RS.2,69,000/-. THE REASON FOR SUDDEN INCREASING THE CURRENT YEAR IS AL SO NOT EXPLAINED. SINCE, THE ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM OF HA VING EARNED AGRICULTURAL INCOME IN THE CURRENT YEAR, THE ADDITION OF RS.5,32 ,197/- MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 68 OF THE I NCOME TAX ACT, 1961 WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE BEFORE US, REFERRED TO PAGE 15 OF THE PAPER BOOK AND SUBMITTED THAT THE SAME CONTAINS SUMMERY OF LAND HOLDING OF THE ASSESSEE. HE REFERR ED TO PAGES 16 TO 25 OF THE PAPER BOOK AND SUBMITTED THAT THESE CONTAIN COP Y OF 7/12 WHICH EVIDENCES THAT TOBACCO WAS PRODUCED IN THE FINANCIA L YEAR 2002-03 AND FINANCIAL YEAR 2004-05 BY THE ASSESSEE. HE ALSO REF ERRED TO PAGES 39 AND 40 OF THE PAPER BOOKS AND SUBMITTED THAT THE EVIDEN CE SALE OF TOBACCO TO SHRI VIRENDRABHAI K. PATEL ON 28.04.2004 AND RECEIP T OF SALE PROCEEDS OF RS.5,32,197/-. FROM THESE EVIDENCES, HE SUBMITTED THAT THE ASSESSEE HAS EARNED GROSS AGRICULTURE INCOME OF RS.5,32,197/-. H E ALSO ARGUED THAT IN THE PAST ALSO THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNT FOR ITS AGRICULTURAL ACTIVITIES AND AFTER ESTIMATING 50% OF GROSS RECEIPT AS EXPENSES - 4 - FOR AGRICULTURE RECEIPTS, BALANCE 50% WAS TREATED A S AGRICULTURE INCOME OF THE ASSESSEE. HE THEREFORE, SUBMITTED THAT AGRICULT URE INCOME OF RS.2,66,098/- SHOULD BE ACCEPTED AND ALLOWED TO THE ASSESSEE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND ARGUED THAT NOT A SINGLE SALE BILL FOR SALE OF TOBACCO WAS FILED BY THE ASSESSEE. THE 7/12 FORMS FILED, WHEREIN IT IS STATED THAT ASSESSE E HAS PRODUCED TOBACCO RELATES TO FINANCIAL YEAR 2002-03 AND 2004-05. NO E VIDENCE FOR GROWING OF TOBACCO IN THE PREVIOUS YEAR 2003-04 RELEVANT TO TH E ASSESSMENT YEAR 2004-05 WAS FILED BY THE ASSESSEE. IN ABSENCE OF AN Y EVIDENCE HAVING BEEN BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT IT H AS GROWN TOBACCO DURING THE YEAR UNDER APPEAL, THE LEARNED ASSESSING OFFICE R WAS JUSTIFIED IN DISALLOWING THE CLAIM OF AGRICULTURE INCOME OF 5,32 ,197/- AND TREATING THE SAME AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSE SSEE HAS CLAIMED TO HAVE EARNED AGRICULTURE INCOME OF RS.5,32,197/- DURING T HE YEAR UNDER CONSIDERATION. THE LEARNED ASSESSING OFFICER FOUND THAT NO RELEVANT MATERIAL IN SUPPORT OF THE ABOVE CLAIM COULD BE FIL ED BY THE ASSESSEE AND ONE SALE BILL DATED 28.04.2004 WHICH WAS FILED BEFO RE HIM WAS FOUND TO BE UNRELIABLE ON EXAMINATION OF THE ALLEGED BUYER SHRI VIRENDRA K. PATEL AND THE ASSESSEE COULD NOT EXPLAIN THE FACTS EVEN WHEN THE FINDINGS ON EXAMINATION OF SAID SHRI VIRENDRA K. PATEL WAS COMM UNICATED TO THE ASSESSEE. ON APPEAL, THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS) CONFIRMED THE ACTION OF THE LEARNED ASSESSING OFFIC ER AS OBSERVED ABOVE. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE FILED EVIDENCES OF THE POSSESSION OF AGRICULTURE LAND BY THE ASSESSEE BY WAY OF FILING OF FORM NO.8A WHICH IS PLACED AT PAGE 15 OF THE PAPER BOOK. THE - 5 - LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE F URTHER RELIED UPON PAGE NO.16 TO 25 OF THE PAPER BOOK, WHICH CONTAINS COPY OF FORM NO.7/12. HOWEVER, IT IS OBSERVED THAT THE SAME DOES NOT EVID ENCES THAT ANY AGRICULTURAL ACTIVITY WAS CARRIED OUT ON THE AGRICU LTURE LAND BELONGING TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. NO MA TERIAL COULD BE BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT ACTUALLY TOB ACCO WAS CULTIVATED ON THE AGRICULTURE LAND OF THE ASSESSEE DURING THE REL EVANT YEAR AS CLAIMED BY THE ASSESSEE. IT IS ALSO OBSERVED THAT THE SALE BI LL WHICH WAS PLACED AT PAGE 39 OF THE PAPER BOOK IS DATED 28.04.2004 AND THEREF ORE, DOES NOT RELATE TO THE YEAR UNDER APPEAL. MOREOVER, THE LEARNED ASSES SING OFFICER POINTED OUT CERTAIN DISCREPANCIES AND GENUINENESS OF THE SA ID SALE BILL WAS DOUBTED AFTER EXAMINATION OF THE ALLEGED PURCHASER. THE DI SCREPANCIES NOTICES WERE INFORMED TO THE ASSESSEE, BUT THE ASSESSEE COULD NO T GIVE ANY EXPLANATION EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US IN RESPECT OF THE SAME. FURTHER, THE CONTENTION OF THE LEARNED AUTHORISED R EPRESENTATIVE OF THE ASSESSEE BEFORE US WAS THAT AS THE AGRICULTURE INCO ME WAS ACCEPTED AT 50% OF THE TOTAL SALE VALUE OF AGRICULTURE PRODUCE IN P AST AND THEREFORE, THE AGRICULTURE INCOME OF THE ASSESSEE FOR THE YEAR UND ER CONSIDERATION SHOULD BE ACCEPTED AT RS.2,66,098/- BEING 50% OF RS.5,32,1 97/-. HOWEVER, WE FIND THAT NO EVIDENCE WAS BROUGHT ON RECORD BY THE ASSES SEE TO SHOW THAT IT ACTUALLY SOLD AGRICULTURE PRODUCE OF THE VALUE OF R S.5,32,197/- DURING THE YEAR UNDER CONSIDERATION. THUS, CONSIDERING THE TO TALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT APART FROM EVIDENCE OF HOLDING OF CERTAIN AGRICULTURE LAND NO ANY OTHER MATERIAL COUL D BE BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT IT ACTUALLY CULTIVATED TOBACCO ON THE AGRICULTURE LAND DURING THE YEAR UNDER CONSIDERATION AND HE HAS RECEIVED ANY PROCEEDS FROM THE SALE OF THE SAID AGRICULTURE PRODUCE DURIN G THE YEAR UNDER CONSIDERATION. THUS, IN OUR CONSIDERED OPINION, MER ELY FROM THE POSSESSION OF AGRICULTURE LAND BY THE ASSESSEE, IT CANNOT BE C ONCLUDED THAT THE ASSESSEE - 6 - ACTUALLY EARNED AGRICULTURE INCOME OF RS.5,32,197/- AS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME OR RS.2,66,098/- A S CONTENDED BY THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE B EFORE US. FURTHER, IN ABSENCE OF ANY MATERIAL BROUGHT ON RECORD BY THE AS SESSEE IN RESPECT OF EXPENSES INCURRED FOR CULTIVATING THE LAND OR FOR G ROWING CROPS, WE FIND NO MATERIAL AVAILABLE ON THE BASIS OF WHICH IT CAN BE HELD THAT THE ASSESSEE ACTUALLY EARNED ANY AGRICULTURE INCOME FROM THE AGR ICULTURE LAND POSSESSED BY IT. THUS, WE DO NOT FIND ANY GOOD REASON TO INT ERFERE WITH THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). IT IS CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 18 TH DAY OF JUNE 2010. SD/- SD/- (MUKUL SHRAWAT ) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 18TH DAY OF JUNE, 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IV, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD - 7 - DATE INITIALS 1. DRAFT DICTATED ON 14.06.2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 15.06.2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 15.06.2010 ------------ ------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 15.06.2010 ----------- -------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 16.06.2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 18.06.2010 ---------- ---------- 7. FILE SENT TO THE BENCH CLERK 18.06.2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------